BP shares tumbled 11pc on Thursday morning after US officials signalled they
would take legal action to force BP to stop paying a dividend.

Associate Attorney General Thomas Perrelli said the Justice Department was "planning to take action" when asked at a Congressional hearing if an injuction was being considered against BP to stop the payout amid anger over the Gulf of Mexico oil spill.

Shares hit a 13-year low of 345.15p in early trading, before rebounding to 368p.

On Wednesday, the company’s American Depositary Receipts (ADRs) fell by $5.48, or 15.8pc, to $29.20. The cost of insuring BP’s debt rose almost half, with credit default swaps on BP rising 126.8 basis points to 387.6 basis points.

More than 40 Congressman and Senators have signed a letter telling Tony Hayward, BP’s chief executive, to suspend dvidend payments.

BP shares have now lost 47pc of their value since the Deepwater Horizon rig exploded and sank on April 20. Before the incident, BP was Britain's biggest company, with a stock market value of £122bn. Since then, more than £50bn has been wiped off its value.

“People are resigning themselves to the fact that there may be a suspension of the dividend,” said Tony Shepard, Charles Stanley’s oil analyst.

BP has repeatedly said it has enough cash to pay the dividend, but it is reviewing its policy.

BP continued to be lambasted on a number of fronts, not least by Ken Salazar, US Interior Secretary, who said the company’s latest containment efforts have increased the flow of oil into the Gulf.

Speaking before the latest Congressional hearing into the spill, he claimed that “the rate of increase may have been somewhere between four and five per cent over what it was before”.

Mr Salazar also said he expected BP to pay the salaries of workers laid off as a result of the US’s moratorium on deepwater drilling in the Gulf.

Tony Hayward, BP’s chief executive who has taken the brunt of the criticism, will appear before Capitol Hill for the first time on June 17, alongside executives from other oil majors. Ladbrokes has cut the odds of the embattled chief executive resigning before the year end from 5-1 to 2-1.